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Interview with Dirk Vantyghem

Dirk Vantyghem
Dirk Vantyghem
Director General
EURATEX
EURATEX

Future lies in reconciling sustainability and competitiveness
EURATEX is the European Apparel and Textile Confederation, representing the interests of the European textile and clothing industry at the level of the EU institutions. As the voice of the European industry, EURATEX aims to create favorable environment within the European Union for manufacturing of textile and clothing products. In an interview with Fibre2Fashion, EURATEX director general Dirk Vantyghem discusses challenges facing European textile and clothing industry, sustainability and Brexit.

Last year, Europe witnessed energy crisis with prices rising abnormally, even though 40 per cent of Europe’s energy needs are met using nuclear energy. How is the industry prepared to meet such crisis in future?

We asked the European Commission and Member States to urgently support the industry to avoid company closures. At the same time, we need a long-term vision to move towards climate neutrality, while keeping the T&C industry internationally competitive. That’s why we proposed 10 critical steps toward climate neutrality. Above all, the apparel and textile industry needs a safe supply with sufficient green energy (electricity and gas) at internationally competitive prices. Additional investments in infrastructure will be needed to guarantee access to new renewable energy supplies.
     As the European textile and clothing sector faces global competition mainly form countries/regions with less stringent climate ambitions, it is of utmost importance that the European T&C companies are prevented form direct and indirect carbon leakage.
 

How big is the European textile and clothing industry in terms of production? Please share import and export figures for the past two years.

The European textile and clothing (T&C) sector generates a turnover of around €140 billion (2020), of which 60 per cent is textile products and 40 per cent apparel. We have 150,000 companies operating in our industry, with 1.5 million workers. Of course, 2020 was a particularly challenging year, due to the pandemic; with a 11.5 per cent drop in textiles and 24 per cent in clothing. The EU T&C industry revived during 2021, reflecting a rebound in exports, turnover, production and retail sales, especially in the textiles segment, which is now back at pre-pandemic levels. Production in the clothing sector increased to some extent in 2021, but it still remained well below pre-pandemic levels.
     Our exports (outside the EU) now exceed €50 billion, which is 41.1 per cent of annual turnover. In the peak of the pandemic, both exports and imports fell drastically, with the exception of imports from China (due to facemasks and related textile products). Trade has picked up in 2021, with strong export figures towards the US (+25 per cent) and China (+33 per cent). Trade with the UK suffered badly from the Brexit transition (-33 per cent).

Which are the main textile and apparel products that are imported by Europe?

According to the latest data available (2020), technical textiles were the main products imported by the EU27 among textile products. Woven fabrics and home textiles’ imports accounted for a less sizeable share.
     Within clothing, the category “other garments” (which includes babies’ garment, t-shirts, special garments, hosiery and clothing accessories) was the one with the highest imports in the EU in 2020. This was mainly due to a surge in EU imports of special garments such as garments, made-up of fabrics of felt and nonwovens (i.e., single-use gowns), which recorded a + 468 per cent boom in value, driven by the pandemic crisis. Women’s clothing was also an important class.

When it comes to adoption of sustainability in the textile and clothing industry, Europe is undoubtedly at the forefront. Do you see the European sustainability initiatives being implemented by other countries/regions as well?

We certainly encourage that. Europe’s ambition to decarbonise the industry and reduce our environmental footprint will only be meaningful if other countries and continents follow the same example. Only then we will see a significant impact on climate change, waste reduction, etc.
     There is also an element of level playing field to consider: if European companies need to comply with ever more stringent measures and standards, while other competing companies do not, this may create a competitive disadvantage, certainly in the short run. That is why we plead for global sustainability targets as much as possible.

What is the role of EURATEX in TCLF Pact for Skills recently signed by 118 organisations?

EURATEX is the coordinator of this initiative promoted by the European Commission. In essence, we aim to invest more in upskilling and reskilling our workforce, make them fit for the new needs of our industry, and to increase the attractiveness of our industry for new generation workers. The TCLF Pact is a commitment from the industry, education providers and the authorities to join forces and roll out programmes which meet this target. We hope to see many initiatives taken in the coming months, which will put in practise the principles of this Pact.

Italian and German textile machinery is well-known for its quality. Can you name few other European products that are also of unparalleled quality?

The Europe T&C industry is indeed relying on quality and design; not only in Italy and Germany but in many other countries as well. We cannot compete purely based on price, but that requires our companies to continuously invest in innovation and people. I should add that “quality” goes more and more hand in hand with “sustainability”. Under the upcoming EU legislation, eco-design criteria and environmental impact will become part of our quality concept.

Has the European T&C industry come out of the COVID-19 crisis? What new challenges do you foresee ahead?

The latest data show that the textile activity is recovering well, and already reached its pre-pandemic level, while clothing companies are still lagging behind. In addition to the economic impact, the COVID-19 crisis has accelerated a transition process towards sustainability, flexible supply chains, and changing consumer behaviour. This transition path is putting our companies at a crossroad.
     EURATEX believes that the future of our industry lies in reconciling sustainability and competitiveness. The industry should be put in the position to innovate and invest in people and digitalisation, and to benefit from fair competition. That requires smart legislation, a global industry perspective, and technical and financial support to a sector which is dominated by small family businesses.

It is 4 months since the REACH4textiles initiative was launched. What is the progress in finding solutions for fair and effective market surveillance on textile products?

REACH4textiles is an EU-funded project which will last 2 years, so we are still in the early process of it. It addresses a fundamental challenge in our industry: the non-compliance of certain textile products with EU regulation, creating market distortion and unfair competition. The project will help our control authorities to better understand the production process in our industry, allowing them to roll out a more effective market surveillance system.

How is the demand recovery post-COVID in EU currently? Do you expect a new normal (different from pre-COVID) in exports demand due to Brexit?

Latest figures confirm that demand has picked up again, even if there are important differences between product categories.

Post-COVID, companies are re-evaluating their supply chains and incorporating near-shoring. Which countries/regions are benefitting the most because of this, and why?

There is indeed a movement to reshore part of the production, to increase flexibility, to spread the risk of supply chain disruptions, and to reduce the environmental impact. It is difficult to quantify that movement, but for instance companies in Turkey certainly benefit from that. In this context, EURATEX is promoting the production of textiles and apparel within the Pan Euro Med region, based on modernised rules of origin.

Today, logistics and unavailability of workforce are the two major problems that are being faced by European retailers. How does EURATEX plan to address these?

EURATEX does not directly represent the retailers, but we are of course in close contact – as they come at the end of our supply chain. They are indeed confronted with disruptions in the supply chain and look for new workforce, which is becoming scarce in Europe. We need a better dialogue between the industry (the producers) and the retailers, and develop joint solutions which make the textiles supply chain stronger, more transparent and resilient.

After a year of Brexit, what do you see as priorities within the EU-UK policy circles to reduce the loss from the policy move?

EURATEX believes that the European Union and the United Kingdom should effectively cooperate to address, solve and remove the issues in the EU-UK Trade agreement, which currently prevent smooth trade flows between the two sides of the Channel.
     Both parties are already engaged in the Trade Specialised Committee on Regulatory Cooperation under the EU-UK Trade and Cooperation Agreement. The Committee has met only once so far, in October 2021 and is due to meet only next year. However, we think that such Committee should serve as a forum for the competent authorities to monitor the situation on the ground and tackle the operative issues taking place on the borders, ensuring that the implementation of the EU-UK agreement is as smooth as possible. Therefore, in this crucial phase, the Committee should step up its cooperation effort and work to ease the pressure and workload that companies must cope with when trading across the EU-UK border.

UK’s total T&C exports to EU were down by almost 50 per cent y/y during January-November 2021. How do you see that changing in 2022?

It is too soon to tell since as of January 1, 2022, the new customs regime is fully in force; EURATEX expects the new procedures to further slow down the movement of textile goods across the EU-UK borders, aggravating the situation from 2021. EURATEX is launching an internal survey to assess what is the situation within its membership, and make recommendations.

Rules of origin norms and levy of taxes to move goods between the UK and EU is one major area of friction. Please, if you could elaborate a little on this, and do you expect a policy solution on this sooner?

The EU has adopted the broadly accepted “double transformation” principle in the rules of origin. We encourage the UK to join the so-called PEM Convention, which would offer great opportunities to develop its supply chain in this Euro-Mediterranean region.

How are EU businesses seeing UK as a market one year after Brexit? Has Brexit also impacted the cost of business in EU?

As said before, the UK continues to be the most important export market for EU textiles and clothing, and it will continue being so. But, given the latest changes, EURATEX is launching an internal survey to assess what is the situation within its membership.

With an important role to play in the industry, how is EURATEX contributing to reduce frictions due to Brexit?

EURATEX plays an important role because we also represent UK’s textile and clothing companies. The fact that UKFT is member of our family means that our industry is united. We internally analyse all the issues due to Brexit, find a compromise or a solution that would make the situation better, and advocate for this solution on both sides of the Channel.
Published on: 08/03/2022

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

This interview was first published in the Mar 2022 edition of the print magazine